Energy Chief: The Long March to U.S. Clean Power Goals

Energy Secretary Steve Chu, along with President Obama, have recast the need to advance the country’s energy policy as a global race rather than a plan to combat climate change. It’s a clever way to appeal to the nationalistic sentiments of many Americans and address concerns by corporate leaders that they are losing business to competitors overseas who enjoy more support from their governments.

“We’ve watched countries like China that say every energy efficiency and energy generation sector is a key industry, and we want to do it ourselves and we want to export it,” Chu said.

Near-term plan: Chu is a big champion of energy efficiency measures, from sealing air ducts to putting sensors in buildings to control energy use. He touted a pilot project to set standards and best practices for home energy audits and provide consumers access to low-interest loans to make their homes more energy efficient. Vice President Joe Biden announced this project last November.

One component of the project is what’s called the Home Energy Score that will offer software and guidelines for energy audits. Developed by the Lawrence Berkeley National Lab, the software will list 40 items that an energy auditor should check when visiting a home, such as heating and cooling systems, lighting and insulation. The idea is to make it easy for consumers to learn how to choose good energy auditors and what information they should expect from an energy audit.

The second component is a 2-year pilot project by the Federal Housing Administration to standardize low-interest loans for homeowners to do energy retrofits. The loans will likely to be around $12,500 on average (up to $25,000), and borrowers can take up to 20 years to pay it back. The FHA is supposed to be corralling banks to participate in the program.

“If the pilot program works, then that will have tremendous impact. That can be a game changer,” Chu said Wednesday.

Mid-term plan: The government has two goals between now and 2035. One is to put 1 million electric cars on the road by 2015. The second is to cut solar electricity costs so that it’s on par with power generated from coal and natural gas by the end of the decade – without government subsidies. Chu spoke in broad terms about boosting federal investments and national labs and the private sector to commercialize technologies.

The DOE and the Treasury Department have already awarded billions of dollars in grants, loans and tax credits to solar electric equipment makers and energy project developers. We should know whether these investments will prove successful by the end of the decade. Last week, the DOE announced $967 million in loan guarantees to First Solar’s 290-megawatt project in Arizona. The DOE and the Agriculture Department also recently offered $571 million in loan guarantees to three biofuel producers (Coskata, Enerkem and Diamond Green Diesel). These projects will take a few years at least to complete.

Long-term plan: Chu fielded several questions about nuclear power, which continues to be a controversial element of the national energy plan. On the research front, scientists are looking at extracting more energy from nuclear fuel, cutting down the time for refueling and other measures to run nuclear plants more efficiently, he said. By doing so, the country will add an equivalent of six to seven new reactors “in the short term.” Already, the nation’s 100-plus nuclear plants can generate power at about 92 percent of the time, up from 75 percent 20 years ago, Chu said.

“We want to see if we can take that used fuel and extract more energy content out of it and in a way that is economical and proliferation-resistant,” Chu said. “That means you can reduce the amount of wastes greatly, like a factor of 10 or 20, not just 2.”

Chu also professed to be “a big fan of small, modular nuclear” systems. These are reactors that will make it possible to build smaller modular power plants and to increase them in size gradually, say, in 100 MW increment. Nuclear power plants today tend to be around 1 GW or more and cost roughly $7 billion to $8 billion each because building at such scale helps to drive down material and other construction costs. But small reactors also can be economical if they are rolled out of factories in large numbers and more easily shipped around the world, Chu said.

“We think (small, modular nuclear) solves a lot of issues in terms of investments and electricity infrastructure,” Chu said. “And it’s a way for the United States to regain its leadership in nuclear.”

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